Another Election, Another Wake-Up Call for Washington

Costa Rica is a small Central American country of four million people that - unlike its neighbors El Salvador, Guatemala, and Nicaragua during their bloody civil wars - has never attracted much attention in the United States, except as a destination for tourists and retirees. But last Sunday's election there should serve as another wake-up call for Washington

When I first met Ottón Solís last year I was glad to hear that he was running for president of Costa Rica. He impressed me as an economist who was well-informed, reasonable, sincere, and committed to economic policies that put the public interest of his country first.

I also thought he had about as much chance of winning as a third party candidate in the United States. I was wrong, as were the major international media, and the most recent pre-election polls. He is currently tied with former Costa Rican president Oscar Arias, as the election authorities conduct a manual vote count to see who has won.

Regardless of the final outcome, Solís' surprise showing has important implications for the course of Latin America and U.S.-Latin American relations. First, it shows how deep the electorate's dissatisfaction is with the status quo in the region, and with the "Washington Consensus" - or "neoliberal" economic policies as it is more commonly labeled in Latin America.

Corruption was an important issue - as it is throughout the region -- with three ex-presidents having become implicated in bribery scandals since 2004. But the major economic policy difference between Solis and his opponents was over CAFTA (the Central America Free Trade Agreement).

Solís, a former planning minister under Arias, argued persuasively that CAFTA as currently written would pose a threat to many of the country's farmers, its telecommunications sector, and to domestic industry. He also objected to the agreement's provision for settling disputes - similar to NAFTA's - which would erode national sovereignty over important economic and environmental policy. And together with many health advocacy organizations in the hemisphere, he has opposed CAFTA's provisions on pharmaceutical drugs, which go beyond the World Trade Organization in their protection of the pharmaceutical industry at the expense of patients.

In the last seven years there have been six winning presidential candidates who ran very explicitly against the "neoliberal" economic reforms of the last 25 years: in Argentina, Brazil, Venezuela, Ecuador, Uruguay, and most recently Bolivia. There is a clear economic reason for this pattern: Over the last 25 years Latin America has suffered the worst economic growth performance in its modern history. From 1980-2005, income per person in the region grew by only 10 percent. In the prior 20 years - 1960-1980 -- it grew by 82 percent.

Costa Rica is better off than most of the region: its per capita income is the third highest in Latin America. Life expectancy is the same as in the United States.

So it is all the more remarkable that an insurgent candidate in Costa Rica could possibly topple the establishment parties that, like Republicans and Democrats here, have ruled the country for the last half century. Even more so that he could do this against Oscar Arias, a Nobel Peace Prize winner and probably the most prominent and respected political figure in the country.

Costa Rica's election shows that this wave of democracy, infused by demands for economic and political change sweeping across Latin America, is still growing stronger. It is no coincidence that Costa Rica, the only one of six countries in the proposed CAFTA agreement to hold out against ratifying it, is much more democratic than the others. Over the last quarter century the majority in Latin America has had little or no say on the most important economic decisions that affect their lives, despite an overall increase in formal electoral democracy. But now they are demanding a voice.

Here in Washington, there is little notice that Latin America's unprecedented economic growth failure might have something to do with the continuing electoral revolt. The failure has been mostly ignored; to the extent that it is acknowledged, policy-makers here argue that the reforms just haven't been implemented enough.

But Latin America's voters beg to differ. With eight more national elections on the 2006 calendar, perhaps the message will eventually get through here.

Mark Weisbrot is Co-Director of the Center for Economic and Policy Research, in Washington, DC.